EXHIBIT 10(b)
EXHIBIT 10(b)
EMPLOYMENT AGREEMENT
THIS AGREEMENT by and between Fleet Financial Group, Inc., a Rhode
Island corporation (the "Company"), and Xxxxxxxx xx Xxxxxx Meirelles (the
"Executive"), dated as of the 14th day of March, 1999.
W I T N E S S E T H
WHEREAS, pursuant to an Agreement and Plan of Merger, dated as of March
14, 1999 (the "Merger Agreement"), among the Company and BankBoston Corporation,
a Massachusetts corporation ("BKB"), BKB shall, as of the Effective Time (as
defined in the Merger Agreement), merge with and into the Company, so that the
Company is the Surviving Corporation (as defined in the Merger Agreement); and
WHEREAS, the Executive is currently party to a severance agreement
entered into with BKB, dated as of June 25, 1998 (the "Prior Agreement"); and
WHEREAS, the Company wishes to provide for the employment by the
Company of the Executive, and the Executive wishes to serve the Company, on the
terms and conditions set forth in this Agreement;
NOW, THEREFORE, it is hereby agreed as follows:
1. EMPLOYMENT PERIOD. The Company shall employ the Executive, and the
Executive shall serve the Company, on the terms and conditions set forth in this
Agreement, for a period (the "Employment Period") commencing on the date (the
"Effective Date") on which occurs the Effective Time and ending on January 1,
2003 or, if earlier, upon the termination of the Executive's employment
hereunder (as of the Date of Termination, as defined in Section 4(d)). This
Agreement shall be null and void if the Effective Time does not occur.
2. POSITION AND DUTIES. (a) During the Employment Period, the Executive
shall serve as the Company's President, Global Banking and Financial Services,
with responsibility for international investment management including management
of the chief investment officer, Fleet Investment Advisors, institutional
investment, institutional sales, retirement products, non-for-profits, regional
investment policy, private banking, Columbia Asset Management, internet
strategy, Galaxy Funds and Quick & Xxxxxx; large corporation and investment
banking, including debt capital markets, specialized industries, Xxxxxxxxx
Xxxxxxxx, private equity and multinationals; and foreign exchange, with such
additional duties and responsibilities as are customarily assigned to such
position, and such other duties and responsibilities not inconsistent therewith
as may from time to time be assigned to him by the Chief Executive Officer of
the Company. During the Employment Period, the Company shall cause the Executive
to be included in the slate of persons nominated to serve as directors on the
Board of Directors of the Company (the "Board") and shall use its best efforts
(including, without limitation, the solicitation of proxies) to have the
Executive elected and reelected to the Board for the duration of the Employment
Period. The Executive shall be a member of the Company's Executive Committee at
all times during the Employment Period.
(b) During the Employment Period, and excluding any periods of vacation
and sick leave to which the Executive is entitled, the Executive shall devote
reasonable attention and time during normal business hours to the business and
affairs of the Company and, to the extent necessary to discharge the
responsibilities assigned to the Executive under this Agreement, use the
Executive's reasonable best efforts to carry out such responsibilities
faithfully and efficiently. It shall not be considered a violation of the
foregoing for the Executive to serve on corporate, industry, civic or charitable
boards or committees, so long as such activities do not significantly interfere
with the performance of the Executive's responsibilities as an employee of the
Company in accordance with this Agreement, provided that the Executive may
continue to participate and engage in activities not associated with the Company
consistent with the Executive's past practices at BKB, including without
limitation the activities listed on Exhibit A hereto.
(c) The Company's headquarters shall be located in Boston,
Massachusetts, and the Executive shall be based and reside in the general area
of Boston, except for travel outside the Boston area in connection with the
business of the Company to such extent as the Executive shall determine is
appropriate, subject to the reasonable approval of the Company with respect to
any travel in excess of 100 business days per year.
(d) Effective as of the Effective Date, the Company and the Executive
shall enter into an agreement concerning the Executive's rights and duties in
the event of a "change in control" of the Company, which shall be the same in
form and
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substance as that of the Chief Executive Officer of the Company on the Effective
Date (the "Initial CEO"). Any benefits to which the Executive becomes entitled
under such agreement shall not be in addition, but shall be reduced by, the
Severance Payments, as defined in Section 6.1 of the Prior Agreement and as
referred to in Section 5(a)(i)(A).
3. COMPENSATION. The Executive's compensation during the Employment
Period shall be determined by the Board upon the recommendation of the committee
of the Board having responsibility for approving the compensation of senior
executives (the "Compensation Committee"), subject to the provisions of Sections
3(a)-(f).
(a) BASE SALARY. During the Employment Period, commencing on the
Effective Date, the Executive shall receive an annual base salary ("Annual Base
Salary") at a rate of not less than $800,000. The Annual Base Salary shall be
payable in accordance with the Company's regular payroll practice for its senior
executives, as in effect from time to time. During the Employment Period, the
Annual Base Salary shall be reviewed by the Compensation Committee for possible
increase at least annually. Any increase in the Annual Base Salary shall not
limit or reduce any other obligation of the Company under this Agreement. The
Annual Base Salary shall not be reduced after any such increase, and the term
"Annual Base Salary" shall thereafter refer to the Annual Base Salary as so
increased.
(b) ANNUAL BONUS. With respect to each fiscal year ending during the
Employment Period, and any partial fiscal year occurring but not ending during
the Employment Period, the Executive shall receive an annual bonus ("Annual
Bonus") of not less than 70% of the annual bonus earned by the Chief Executive
Officer of the Company, with appropriate prorating for any such partial fiscal
year. The Annual Bonus shall be payable in accordance with the Company's regular
payroll practice for its senior executives, as in effect from time to time.
(c) OTHER INCENTIVE COMPENSATION. (i) During the Employment Period, the
Executive shall be eligible to participate in short-term incentive compensation
plans and long-term incentive compensation plans (the latter to consist of plans
offering stock options, restricted stock and/or other long-term incentive
compensation, as adopted and approved by the Board or the Compensation Committee
from time to time).
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(ii) Without limiting the generality of the foregoing, the Company
shall grant to the Executive, as of the Effective Date, 300,000 restricted
shares (the "Restricted Stock Grant") of the Company's common stock ("Common
Shares"). Subject to the provisions of Section 5 and subject to the attainment
of the performance criteria previously agreed upon, all restrictions with
respect to the Restricted Stock Grant shall lapse, with respect to one-sixth of
the shares subject to such grant, at the close of the first full fiscal quarter
of the Company following the Effective Date; with respect to one-third of the
shares subject to such grant, on each of December 31, 2000 and December 31,
2001; and with respect to one-sixth of the shares subject to such grant, on
December 31, 2002. If the Executive's employment shall be terminated prior to
the lapse of restrictions with respect to all or a portion of the Common Shares
subject to the Restricted Stock Grant (the "Unvested Shares"), the Unvested
Shares shall be forfeited if the termination of employment is by the Company for
Cause or by the Executive other than for Good Reason and shall become fully
vested if the termination of employment is for any other reason. Subject to the
foregoing provisions of this Section 3(c)(ii), the terms of the Restricted Stock
Grant shall be consistent with the terms of the BankBoston 1996 Long-Term
Incentive Plan (the "BKB Stock Plan").
(iii) Without limiting the generality of the foregoing, as of the
Effective Date and as of each of the first two anniversaries of the Effective
Date, the Company shall make awards to the Executive of a nonqualified option,
with an initial term of 10 years, to purchase 200,000 Common Shares (the "Option
Grants"). Subject to the provisions of Section 5, each of the Option Grants
shall vest and become exercisable as determined by the Board of Directors of the
combined company (or the compensation committee of the Board of Directors),
provided that at least one-third of the shares subject to each Option Grant
shall vest and become exercisable on each of the first three anniversaries of
the date of grant. Subject to the foregoing provisions of this Section
3(c)(iii), the terms of the Option Grants shall be consistent with the terms of
the BKB Stock Plan.
(iv) Prior to the date of grant of each of the Restricted Stock
Grants and Option Grants, the Company shall register, on a Form S-8 or other
appropriate form, the Common Shares subject to the Restricted Stock Grant and
the Option Grant.
(d) SERP. During the Employment Period, the Executive shall continue to
participate in BKB's supplemental retirement plans or any successor thereto or
substitute therefor, or, if more favorable to the Executive, in the supplemental
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retirement plans in which the Initial CEO participates, with credit thereunder
for his years of service with the BKB, provided that the aggregate annual
defined benefit retirement income (including retirement income from
tax-qualified defined benefit retirement plans), expressed as a single life
annuity, to which the Executive shall be entitled upon his termination of
employment with the Company for any reason shall not be less than (but may be
more than) $750,000, unreduced for any reason, including early retirement. Upon
the death of the Executive, if his spouse survives him, his spouse shall be
entitled to an aggregate annual defined benefit retirement income for her life
of not less than 75% of the amount set forth in the immediately preceding
sentence. The benefit provided under this Section 3(d) (the "SERP Benefit")
shall be distributed in the same form as the benefits to which the Executive is
entitled under the BankBoston Cash Balance Retirement Plan or any successor
thereto. This Section 3(d) shall not expire or terminate upon the expiration or
termination for any reason of this Agreement and shall continue in full force
and effect upon such expiration or termination.
(e) FRINGE BENEFITS. During the Employment Period, the Executive shall
be entitled to receive fringe benefits on a basis not less favorable than
provided to similarly situated senior executives of the Company. Without
limiting the foregoing, the Company shall provide the Executive with (i)
continuation of the interest-free loan made to the Executive by BKB, on the
same terms and conditions; (ii) during the Employment Period, the use for
business purposes only of an airplane capable of traveling non-stop from Boston
throughout the United States, Western Europe and Brazil and the use of a Company
automobile, with driver, on a basis no less favorable to the Executive than
immediately prior to the Effective Date, provided that, notwithstanding the
provisions of clause C of Section 4(c)(i), a failure to comply with this Section
3(e)(ii) will not constitute Good Reason unless there is a pattern of such
noncompliance; and (iii) personal security satisfactory to the Executive while
the Executive or any member of his immediate family is in Brazil during the
period that the Executive is an employee of the Company and following
termination of his employment for any reason for an Additional Period (as
defined below in this Section 3(e)), subject to the cost limitations set forth
below in this Section 3(e). "Additional Period" shall mean (x), as of the
Effective Date, one year following termination of employment , (y) as of the
second anniversary of the Effective Date, if the Executive is an employee of the
Company on such second anniversary, two years following termination of
employment, and (z) as of the fourth anniversary of the Effective Date, if the
Executive is an employee of the Company on such fourth anniversary, three years
following termination of employment . The cost of providing such personal
security following termination of the Executive's employment shall
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not exceed an annual rate of $700,000 for each year following termination of
employment.
(f) OTHER BENEFITS. During the Employment Period, (i) the Executive
shall participate in all applicable savings and retirement plans, practices,
policies and programs of the Company on a basis not less favorable than provided
to similarly situated senior executives of the Company; and (ii) the Executive
and/or the Executive's eligible dependents, as the case may be, shall be
eligible for participation in, and shall receive all benefits under, all
applicable welfare benefit plans, practices, policies and programs provided by
the Company, including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life insurance, group life insurance,
accidental death and travel accident insurance plans and programs on the same
basis and subject to the same terms, conditions, cost-sharing requirements and
the like as provided to similarly situated senior executives of the Company.
4. TERMINATION OF EMPLOYMENT. (a) DEATH OR DISABILITY. The Executive's
employment shall terminate automatically upon the Executive's death. The Company
shall be entitled to terminate the Executive's employment because of the
Executive's Disability during the Employment Period. "Disability" means that (i)
the Executive has been unable, for the period specified in the Company's
disability plan for senior executives, but not less than a period of 180
consecutive business days, to perform the Executive's duties under this
Agreement, as a result of physical or mental illness or injury, and (ii) a
physician selected by the Company or its insurers, and acceptable to the
Executive or the Executive's legal representative, has determined that the
Executive is disabled within the meaning of the applicable disability plan for
senior executives. A termination of the Executive's employment by the Company
for Disability shall be communicated to the Executive by written notice, and
shall be effective on the 30th day after receipt of such notice by the Executive
(the "Disability Effective Date"), unless the Executive returns to full-time
performance of the Executive's duties before the Disability Effective Date.
(b) TERMINATION BY THE COMPANY. (i) The Company may terminate the
Executive's employment for Cause or without Cause. "Cause" means (A) the
conviction of the Executive for the commission of a felony from which all final
appeals have been taken, or (B) willful gross misconduct by the Executive in
connection with his employment by the Company, in either case that results in
material and demonstrable financial harm to the Company. No act or failure to
act
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on the part of the Executive shall be considered "willful" unless it is done, or
omitted to be done, by the Executive in bad faith or without reasonable belief
that the Executive's action or omission was in the best interests of the
Company. Any act or failure to act that is based upon authority given pursuant
to a resolution duly adopted by the Board, or the advice of counsel for the
Company, shall be conclusively presumed to be done, or omitted to be done, by
the Executive in good faith and in the best interests of the Company. In the
event of a dispute concerning the application of this provision, no claim by the
Company that Cause exists shall be given effect unless the Company establishes
to the Board by clear and convincing evidence that Cause exists.
(ii) A termination of the Executive's employment for Cause shall
not be effective unless it is accomplished in accordance with the following
procedures. The Company shall give the Executive written notice ("Notice of
Termination for Cause") of its intention to terminate the Executive's employment
for Cause, setting forth in reasonable detail the specific conduct of the
Executive that it considers to constitute Cause and the specific provisions of
this Agreement on which it relies, and stating the date, time and place of the
Special Board Meeting for Cause. The "Special Board Meeting for Cause" means a
meeting of the Board called and held specifically and exclusively for the
purpose of considering the Executive's termination for Cause, that takes place
not less than twenty nor more than thirty business days after the Executive
receives the Notice of Termination for Cause. The Executive shall be given an
opportunity, together with counsel, to be heard at the Special Board Meeting for
Cause. The Executive's termination for Cause shall be effective when and if a
resolution is duly adopted at the Special Board Meeting for Cause by affirmative
vote of three-quarters of the entire membership of the Board stating that, in
the good faith opinion of the Board, the Executive is guilty of the conduct
described in the Notice of Termination for Cause and that such conduct
constitutes Cause under this Agreement.
(c) GOOD REASON. (i) The Executive may terminate employment for Good
Reason or without Good Reason. "Good Reason" means:
A. the failure of the Company to cause the Executive to be
elected to the Board or to be appointed to the Company's Executive
Committee;
B. the assignment to the Executive of any duties or
responsibilities inconsistent in any respect with those customarily
associated
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with the position (including status, offices, titles and reporting
requirements) to be held by the Executive during the Employment Period
pursuant to this Agreement, the appointment of any other Executive to
perform any of the duties or responsibilities customarily associated with
such position, or any other action by the Company that results in a
diminution or other material adverse change in the Executive's position,
authority, duties or responsibilities, other than an isolated,
insubstantial and inadvertent action that is not taken in bad faith and is
remedied by the Company promptly after receipt of notice thereof from the
Executive;
C. any failure by the Company to comply with any provision of
Section 3 of this Agreement, other than an isolated, insubstantial and
inadvertent failure that is not taken in bad faith and is remedied by the
Company promptly after receipt of notice thereof from the Executive;
D. any requirement by the Company that the Executive's
services be rendered primarily at a location or locations other than that
provided for in Section 2(c) of this Agreement;.
E. any failure by the Company to comply with Section 10(c) of
this Agreement; or
F. any other material breach of this Agreement by the Company
that is not remedied by the Company promptly after receipt of notice thereof
from the Executive.
(ii) For purposes of this Section 4(c), any good faith
determination of "Good Reason" made by the Executive shall be conclusive. A
termination of employment by the Executive for Good Reason shall be effectuated
by giving the Company written notice ("Notice of Termination for Good Reason")
of the termination, setting forth in reasonable detail the specific conduct of
the Company that constitutes Good Reason and the specific provision(s) of this
Agreement on which the Executive relies. A termination of employment by the
Executive for Good Reason shall be effective on the fifth business day following
the date when the Notice of Termination for Good Reason is given, unless the
notice sets forth a later date (which date shall in no event be later than 30
days after the notice is given).
(iii) The failure to set forth any fact or circumstance in a
Notice of Termination for Good Reason shall not constitute a waiver of the right
to assert, and
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shall not preclude the party giving notice from asserting, such fact or
circumstance in an attempt to enforce any right under or provision of this
Agreement.
(iv) A termination of the Executive's employment by the Executive
without Good Reason shall be effected by giving the Company written notice of
the termination.
(d) DATE OF TERMINATION. The "Date of Termination" means the date of
the Executive's death, the Disability Effective Date, or the date on which the
termination of the Executive's employment by the Company for Cause or without
Cause or by the Executive for Good Reason or without Good Reason is effective,
as the case may be.
5. OBLIGATIONS OF THE COMPANY UPON TERMINATION. (a) OTHER THAN FOR
CAUSE; FOR GOOD REASON; DEATH OR DISABILITY. If, during the Employment Period,
the Company terminates the Executive's employment for Disability or any other
reason other than Cause; or the Executive terminates employment for Good Reason;
or the Executive's employment is terminated by reason of his death; the Company
shall
(i) pay to the Executive (or, in the event of termination of
employment by reason of the Executive's death, as provided in Section 10(a)),
in a lump sum, in cash, within five business days after the Date of
Termination, or as otherwise provided in this Section 5(a)(i),
(A) the "Severance Payments" as defined in Section 6.1 of
the Prior Agreement (including without limitation payment to the
Executive on account of the items described in paragraph (C) of such
Section 6.1), representing the amounts and benefits to which the
Executive would have been entitled under the Prior Agreement, as
determined by the Auditor (as defined in Section 5 (d)) no later than 30
days after the execution of this Agreement, plus interest from the
Effective Date to the date of the payment of such Severance Payments, at
an annual rate equal to the "prime" rate as in effect on the Date of
Termination, compounded daily (the "New Severance Payment"), provided
that the Executive may elect to reduce the Severance Payments by the
amount described in paragraph (B) of Section 6.1 of the Prior Agreement
and, in lieu thereof, receive for a period of three years following the
Date of Termination the continuation of the benefits described in Section
3(f)(ii); and
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(B) the sum of the following amounts (the "Accrued
Obligations"): (1) any portion of the Executive's Annual Base Salary through
the Date of Termination that has not yet been paid; (2) an amount equal to
the product of (A) the maximum annual bonus that the Executive would have
been eligible to earn for the year during which such termination occurs, and
(B) a fraction, the numerator of which is the number of days in such year
through the Date of Termination, and the denominator of which is 365; and
(3) the SERP Benefit and all compensation and benefits payable to the
Executive under the terms of the Company's compensation and benefit plans,
programs or arrangements as in effect immediately prior to the Date of
Termination, provided that the form of the SERP Benefit shall be determined
pursuant to Section 3(d) (the "SERP Procedure") and the form of other
benefits described in this clause (B)(3) shall be determined in accordance
with the aforesaid plans, programs and arrangements; and
(ii) cause the Restricted Stock Grant, to the extent then unvested
or forfeitable, to become immediately and fully vested, and the Option Grants,
to the extent then not exercisable, to become immediately and fully exercisable;
and for purposes of any post-termination exercise period associated with such
awards, consider the Executive to have remained employed through January 1,
2003; and
(iii) unless termination of employment is by reason of death, at
its expense, provide the Executive with outplacement services suitable to the
Executive's position three years following the Date of Termination or, if
earlier, until the first acceptance by the Executive of an offer of employment.
(b) BY THE EXECUTIVE OTHER THAN FOR GOOD REASON; UPON TERMINATION
FOLLOWING EXPIRATION OF THE AGREEMENT. If the Executive voluntarily terminates
employment, other than for Good Reason, during the Employment Period or if the
Executive's employment terminates for any reason following January 1, 2003, the
Company shall pay to the Executive (1) in a lump sum in cash within 30 days of
the Date of Termination, the New Severance Payment and any portion of the
Executive's Annual Base Salary through the Date of Termination that has not been
paid; and (2) the SERP Benefit in accordance with the SERP Procedure and all
compensation and benefits payable to the Executive under the terms of the
Company's compensation and benefit plans, programs or arrangements as in effect
immediately prior to the Date of Termination.
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(c) BY THE COMPANY FOR CAUSE. If the Executive's employment is
terminated by the Company for Cause on or prior to January 1, 2003, the Company
shall pay to the Executive (1) any portion of the Executive's Annual Base Salary
through the Date of Termination that has not been paid; and (2) the SERP Benefit
in accordance with the SERP Procedure and all compensation and benefits payable
to the Executive under the terms of the Company's compensation and benefit
plans, program or arrangements as in effect immediately prior to the Date of
Termination.
(d) EXCISE TAX PAYMENT. (i) In the event that any payment or benefit
received or to be received by the Executive pursuant to the terms of this
agreement (the "Contract Payments") or of any other plan, arrangement or
agreement of the Company (or any affiliate) (together with the Contract
Payments, the "Total Payments") would be subject to the excise tax (the "Excise
Tax") imposed by section 4999 of the Code as determined as provided below, then,
subject to the provisions of Section5(d)(ii), the Company shall pay to the
Executive, at the time specified in Section 5(d)(iii) below, an additional
amount (the "Gross-Up Payment") such that the net amount retained by the
Executive, after deduction of the Excise Tax on Total Payments and any federal,
state and local income and employment taxes and the Excise Tax upon the Gross-Up
Payment, and any interest, penalties or additions to tax payable by the
Executive with respect thereto, shall be equal to the total present value (using
the applicable federal rate (as defined in section 1274(d) of the Code in such
calculation) of the Total Payments at the time such Total Payments are to be
made. For purposes of determining whether any of the Total Payments will be
subject to the Excise Tax and the amounts of such Excise Tax, (A) the total
amount of the Total Payments shall be treated as "parachute payments" within the
meaning of section 280G(b)(2) of the Code, and all "excess parachute payments"
within the meaning of section 280G(b)(1) of the Code shall be treated as subject
to the Excise Tax, except to the extent that, in the opinion of the independent
auditor of BKB immediately prior to the Effective Date (the "Auditor"), such
amount (in whole or in part) does not constitute a "parachute payment" within
the meaning of section 280G(b)(2) of the Code, or such "excess parachute
payments" (in whole or in part) are not subject to the Excise Tax, (B) the
amount of the Total Payments that shall be treated as subject to the Excise Tax
shall be equal to the lesser of (1) the total amount of the Total Payments or
(2) the amount of "excess parachute payments" within the meaning of section
280G(b)(1) of the Code (after applying clause (A) hereof), and (C) the value of
any noncash benefits or any deferred payment or benefit shall be determined by
the Auditor in accordance with the principles of sections 280G(d)(3) and (4) of
the Code. For purposes of determining the amount of the Gross-Up
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Payment, the Executive shall be deemed to pay federal income taxes at the
highest marginal rate of federal income taxation applicable to individuals in
the calendar year in which the Gross-Up Payment is to be made and state and
local income taxes at the highest marginal rates of taxation applicable to
individuals as are in effect in the state and locality of the Executive's
residence in the calendar year in which the Gross-Up Payment is to be made, net
of the maximum reduction in federal income taxes that can be obtained from
deduction of such state and local taxes, taking into account any limitations
applicable to individuals subject to federal income tax at the highest marginal
rate.
(ii) In the event that, after giving effect to any
redeterminations described in Section 5(d)(iv), the sum of the Total Payments
and the Gross-Up Payment (in each case after deduction of the net amount of
federal, state and local income and employment taxes and the amount of Excise
Tax to which the Executive would be subject in respect of such Total Payments
and the Gross-Up Payment) does not equal or exceed 110% of the largest amount of
Total Payments that would result in no portion of the Total Payments being
subject to the Excise Tax (after deduction of the net amount of federal, state
and local income and employment taxes on such reduced Total Payments), then
Section 5(d)(i) shall not apply and, to the extent necessary to ensure that no
portion of the Total Payments is subject to the Excise Tax, the cash Contract
Payments shall first be reduced (if necessary, to zero), and the noncash
Contract Payments shall thereafter be reduced (if necessary, to zero); provided,
however, that the Executive may elect to have the noncash Contract Payments
reduced (or eliminated) prior to any reduction of the cash Contract Payments.
(iii) The Gross-Up Payments provided for in Section 5(d)(i) shall
be made upon the earlier of (i) ten days following termination of the
Executive's employment or (ii) ten days following the imposition upon the
Executive or payment by the Executive of any Excise Tax.
(iv) If it is established pursuant to a final determination of a
court or an Internal Revenue Service proceeding or the opinion of the Auditor
that the Excise Tax is less than the amount taken into account under Section
5(d)(i) , the Executive shall repay to the Company within thirty (30) days of
the Executive's receipt of notice of such final determination or opinion the
portion of the Gross-Up Payment attributable to such reduction (plus the portion
of the Gross-Up Payment attributable to the Excise Tax and federal, state and
local income and employment taxes imposed on the Gross-Up Payment being repaid
by the Executive if such repayment results in
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a reduction in Excise Tax or a federal, state or local income or employment tax
deduction) plus any interest received by the Executive on the amount of such
repayment. If it is established pursuant to a final determination of a court or
an Internal Revenue Service proceeding or the opinion of the Auditor that the
Excise Tax exceeds the amount taken into account hereunder (including by reason
of any payment the existence or amount of which cannot be determined at the time
of the Gross-Up Payment), the Company shall make an additional Gross-Up Payment,
plus any interest and penalties, in respect of such excess within thirty (30)
days of the Company's receipt of notice of such final determination or opinion.
(v) All fees and expenses of the Auditor incurred in connection
with this agreement shall be borne by the Company.
6. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent
or limit the Executive's continuing or future participation in any plan,
program, policy or practice provided by the Company or any of its affiliated
companies for which the Executive may qualify, nor shall anything in this
Agreement limit or otherwise affect such rights as the Executive may have under
any contract or agreement with the Company or any of its affiliated companies.
Vested benefits and other amounts that the Executive is otherwise entitled to
receive under any plan, policy, practice or program of, or any contract of
agreement with, the Company or any of its affiliated companies on or after the
Date of Termination shall be payable in accordance with the terms of each such
plan, policy, practice, program, contract or agreement, as the case may be,
except as explicitly modified by this Agreement.
7. FULL SETTLEMENT. The Company's obligation to make the payments
provided for in, and otherwise to perform its obligations under, this Agreement
shall not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action that the Company may have against the Executive or
others. In no event shall the Executive be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement and such amounts shall
not be reduced, regardless of whether the Executive obtains other employment.
8. CONFIDENTIAL INFORMATION. The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliated companies and
their respective businesses that the Executive obtains during the Executive's
employment by the Company or any of its affiliated companies and that is not
public
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knowledge (other than as a result of the Executive's violation of this Section
8) ("Confidential Information"). The Executive shall not communicate, divulge or
disseminate Confidential Information at any time during or after the Executive's
employment with the Company, except with the prior written consent of the
Company or as otherwise required by law or legal process.
9. INDEMNIFICATION; ATTORNEYS' FEES. The Company shall pay or indemnify
the Executive to the full extent permitted by law and the by-laws of the Company
for all expenses, costs, liabilities and legal fees which the Executive may
incur in the discharge of his duties hereunder. The Company also agrees to pay,
as incurred, to the fullest extent permitted by law, or indemnify Executive if
such payment is not legally permitted, for all legal fees and expenses that the
Executive may in good faith incur as a result of any contest (regardless of the
outcome) by the Company, the Executive or others of the validity or
enforceability of or liability under, or otherwise involving, any provision of
this Agreement, together with interest on any delayed payment at the applicable
federal rate provided for in Section 7872(f)(2)(A) of the Code.
10. SUCCESSORS. (a) This Agreement is personal to the Executive and,
without the prior written consent of the Company, shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
(c) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would have been required to perform it if no such
succession had taken place. As used in this Agreement, "the Company" shall mean
both the Company as defined above and any such successor that assumes and agrees
to perform this Agreement, by operation of law or otherwise.
11. MISCELLANEOUS. (a) This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of Massachusetts,
without reference to its principles of conflict of laws. The captions of this
Agreement
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are not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified except by a written agreement executed
by the parties hereto or their respective successors and legal representatives.
(b) All notices and other communications under this Agreement shall be
in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive:
Xxxxxxxx xx Xxxxxx Meirelles
c/o Chairman's Xxxxxx
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Mail Code: MA BOS 01-25-14
If to the Company:
Fleet Financial Group, Inc.
Xxx Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
or to such other address as either party furnishes to the other in writing in
accordance with this Section 11(b). Notices and communications shall be
effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement. If any provision of this Agreement shall be held invalid or
unenforceable in part, the remaining portion of such provision, together with
all other provisions of this Agreement, shall remain valid and enforceable and
continue in full force and effect to the fullest extent consistent with law.
(d) Notwithstanding any other provision of this Agreement, the Company
may withhold from amounts payable under this Agreement all federal, state, local
and foreign taxes that are required to be withheld by applicable laws or
regulations.
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(e) The Executive's or the Company's failure to insist upon strict
compliance with any provisions of, or to assert, any right under, this Agreement
(including, without limitation, the right of the Executive to terminate
employment for Good Reason pursuant to paragraph (c) of Section 4) shall not be
deemed to be a waiver of such provision or right or of any other provision of or
right under this Agreement.
(f) The Executive and the Company acknowledge that this Agreement
supersedes any other agreement, including the Prior Agreement (except to the
extent the Prior Agreement is referenced in Section 5(a)(i) hereof) between them
concerning the subject matter hereof.
(g) The rights and benefits of the Executive under this Agreement may
not be anticipated, assigned, alienated or subject to attachment, garnishment,
levy, execution or other legal or equitable process except as required by law.
Any attempt by the Executive to anticipate, alienate, assign, sell, transfer,
pledge, encumber or charge the same shall be void. Payments hereunder shall not
be considered assets of the Executive in the event of insolvency or bankruptcy.
(h) This Agreement may be executed in several counterparts, each of
which shall be deemed an original, and said counterparts shall constitute but
one and the same instrument.
(i) The obligations of the Company and the Executive under Sections 3
(e), 5 (including without limitation Section 5(b)), 6, 7, 8, 9 and 10 (in
addition to those under Section 3(d)) shall survive the expiration or
termination for any reason of this Agreement.
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IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization of its Board, the Company has caused this
Agreement to be executed in its name on its behalf, all as of the day and year
first above written.
FLEET FINANCIAL GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
--------------------------------
Title: Executive Vice President
& General Counsel
-------------------------
/s/ Xxxxxxxx xx Xxxxxx Meirelles
-----------------------------------
EXECUTIVE
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EXHIBIT A
OUTSIDE ACTIVITIES AS OF DATE OF AGREEMENT
Xx. Xxxxxxxxx is a member of the Board of Directors of Champion
International Corporation, Raytheon Corporation, Bestfoods (formerly known as
CPC International Inc.), the New England Conservatory, Accion International and
the Public Broadcasting System in Sao Paulo, Brazil. Xx. Xxxxxxxxx is also a
member of the Advisory Council of the Harvard Business School Initiative on
Global Corporate Governance, the Boston College Xxxxxxx School of Management,
the Xxxxxx Xxxxxx University in Santiago, Chile, and Xxxx of the Advisory Board
of the MIT Xxxxx School of Management. He is the founding President of the Latin
American Leasing Federation, Chairman Emeritus of the Brazilian Association of
International Banks, Chairman of the Society for the Revitalization of the City
of Sao Paulo, and Chairman of the Travessia Foundation. In addition, Xx.
Xxxxxxxxx is an Executive Committee Member of the U.S. Brazilian Business
Council and of the American Chamber of Commerce in Sao Paulo, Brazil.
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